Microsoft to reorganize units: source

Bloomberg

Microsoft chief executive officer Steve Ballmer speaks to the press in Tokyo, Japan, on May 23.

Photo: AFP

Microsoft Corp chief executive officer Steve Ballmer is planning a reorganization aimed at reducing the number of business units and putting more focus on devices and services, according to people familiar with the matter.

The changes would give greater responsibility to executives including Satya Nadella, head of the server business, Don Mattrick, who runs Xbox, Qi Lu (陸奇), chief of the online group, and Tony Bates, president of Skype, according to two people, who asked not to be identified because the discussions are private.

Andy Lees, who has overseen corporate development and strategy since November last year, will probably leave the company in the coming months, the people said.

Ballmer, who is struggling to gain share in mobile phones and tablets, announced a shift in strategy last year for the world’s largest software maker to focus on computing devices and Internet-based services.

Any staffing changes will also provide clues as to the executives who may eventually succeed Ballmer.

Plans for the executive shakeup, which Ballmer, 57, has been discussing with the board, are not final and may still change, the people said.

The All Things D blog reported some details of the restructuring yesterday.

The changes are aimed at cutting the number of disparate units and fostering cooperation between products so that Microsoft can better compete against Apple Inc and Google Inc, a source said.

One idea under consideration by Ballmer would create four divisions: an enterprise business led by Nadella; a hardware unit overseen by Mattrick; an applications and services division under Lu; and an operating-systems group jointly led by Terry Myerson, Windows phone chief, and Julie Larson-Green, head of Windows engineering, a source said.

Bates would also be given a significant role, the person said.

In April, activist investor ValueAct Holdings LP disclosed a stake of about a US$1.9 billion in Microsoft and said the company should become a leader in Web-based cloud computing, putting more pressure on Ballmer to focus on that area.

Microsoft currently has eight divisions or units, and six presidents. The Windows business has been run by two vice presidents, Larson-Green and Tami Reller, since Steven Sinofsky was pushed out in November last year. The Office unit is run by Kurt DelBene.

The reorganization has been under discussion even before Sinofsky’s ouster, the sources said.

Ballmer stressed at the time the need for Microsoft’s groups to better cooperate and for executives to make that happen.

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